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A Central Bank Initiates a Contractionary Monetary Policy That Is

Question 75

Multiple Choice

A central bank initiates a contractionary monetary policy that is correctly anticipated by economic agents in the economy. The result is


A) decreased prices, but no change in real GDP.
B) decreased prices and decreased real GDP in the short run, but only decreased prices in the long run.
C) decreased real GDP in the short run and decreased prices in the long run.
D) decreased real GDP and prices in both the short run and the long run.

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